NH Korindo Sekuritas Indonesia
Please consider the rating criteria & important disclaimer
Company Report | Jul 20, 2018
Price date as of Jul 19, 2018
52 wk range (Hi/Lo) 910 / 605 Mitra Adiperkasa Tbk | Summary (IDR bn)
Source: Company Data, Bloomberg, NHKS Research
Share Price Performance
YTD 1M 3M 12M
Abs. Ret. 29.0% -6.4% -1.0% 28.0%
Rel. Ret. 36.7% -6.2% 6.6% 26.9%
1Q18 Buoyant Top Line Performance
MAPI succeeded to secure the 1Q18’s revenue of IDR4.3 trillion (+19.3% y-y). Of note, the retail sales segment — a major segment — snapped a higher growth of 23.9% y-y into IDR3.1 trillion. The growth likely persists
until 2Q18 along with the 2018’s Lebaran sales performance beefing up
20% compared to the 2017’s Lebaran performance. Furthermore, the 1Q18’s same store sales growth (SSSG) reached 8%; the 1Q18’s sales contributed by Vietnam-based stores edged up 7.2%.
The buoyant top line performance was entwined with the outstanding growth of 499.1% y-y to IDR351 billion in the 1Q18 net profit. However, a steep surge in net profit stemmed from the land sales profit amounting to IDR233 billion.
Focus on Core Brand Expansion
To succeed its 2018’s target, MAPI likely launches new stores focusing on
its core brands, while to boost the café and restaurants performance to hit 20%, it aims to launch 70 new stores.
Settlement of Stock Split with Ratio 1:10 and Subsidiary IPO
MAPI settled two corporate actions in 2Q18. Since June 4th, its number of shares were 16.6 billion with the par value of IDR50. Additionally, on July 5th, its subsidiary, PT MAP Aktif Adiperkasa Tbk performed IPO and secured the proceeds from IPO to amount to IDR898 billion.
Target Price of IDR945
We use an estimate at a forward P/E of 17.9x (0.4SD lower than the last 2
-year average) as the basis for the valuation method. The target price implies a 2018E P/E of 19.9x (vs. the current P/E of 16.8x).
2016/12A 2017/12A 2018/12E 2019/12E
Revenue 14,150 16,306 18,721 21,469
Revenue growth 10.3% 15.2% 14.8% 14.7%
EBITDA 1,512 1,803 2,159 2,455
Net profit 209 335 790 882
EPS (IDR) 13 20 48 53
EPS growth 458.4% 60.5% 136.1% 11.6%
BVPS (IDR) 193 256 348 395
EBITDA Margin 10.7% 11.1% 11.5% 11.4%
Net Profit Margin 1.5% 2.1% 4.2% 4.1%
ROE 6.8% 9.0% 15.8% 14.3%
MAPI at A Glance
MAPI as one of the leading retailers in Indonesia boasts of its ample branded portfolios — more than 110 globally marketed brands. Founded in 1995, it initially focused only on
sports products. Now, it establishes a well-nurtured business in vast lines of sports
products, fashion, department stores, food & beverages, kids’ products, lifestyle targeted to the middle – high income individuals.
Not only does MAPI run its business in Indonesia but it also expands its markets in neighboring countries: Singapore, Malaysia, Thailand, Australia, etc. The launch of Zara’s first store in Vietnam market in 2016 portrayed its agile market expansion. Indeed, it
dominates Indonesia market with more-than 2.200 retail stores across 70 big cities.
Indonesia-based Retail Industry in ASEAN
Indonesia is the first most populous nation in ASEAN; such characteristic develops Indonesia into a lucrative market for the retail business. Such top retailers as LPPF, RALS, MAPI with their stores across Indonesia dominate Indonesia – based retail market. The Indonesian Retailers Association (Aprindo) targets the growth of 9% in the 2018’s retail business. The authority's policy leaves the electricity tariff and subsidized petroleum price unchanged until 2019 is a takeaway catalyst for the recovery in consumers’ purchasing power until 2019.
The retail industry in ASEAN market is feverish, the negative sales growth figures in Singapore and Thailand— for instance. This backdrop causes the retailers in ASEAN to
strictly curb the operational cost with a view to balancing market. Nonetheless, in
2017, most of retailers consistently posted high price-earnings ratio and two-digit ROE. In the margin outlook, Indonesia retailers succeed in posting higher margin than its ASEAN peers’ margins.
ASEAN Retailers
Source: Bloomberg, NHKS research
Company Market Cap (USD mn) Total Asset (USD mn) GrowthSales MarginGross Operating Margin ROE P/E P/BV Dividend Yield
LPPF 1,709 399 1.28% 62.5% 23.7% 81.7% 13.0x 9.6x 5.4%
Source: Company, NHKS research
Source: Company, NHKS research Source: Company, NHKS research
Days of Inventory | 1Q16 - 1Q18
Operational Performance
Quarterly Revenue (IDR bn) | 1Q16 - 1Q18 Quarterly Net Profit (IDR bn) | 1Q16 - 1Q18
Source: Company, NHKS research
Revenue in Vietnam (IDR bn) | 1Q16 - 1Q18
Source: Company, NHKS research Source: Company, NHKS research
Multiple Valuation
Forward P/E band | Last 2 years Dynamic Forward P/E band | Last 2 years
Rating and target price
Date Rating Target Price Last Price Consensus vs Last Price vs Consensus
04/09/2018 Buy 945 790 866 +19.6% +9.1%
07/19/2018 Buy 945 800 818 +18.1% +15.5%
Closing and Target Price
Source: NHKS research Analyst Coverage Rating
Source: Bloomberg
Source: NHKS research Source: NHKS research
NH Korindo Sekuritas Indonesia (NHKS) stock ratings
1. Period: End of year target price
2. Rating system based on a stock’s absolute return from the date of publication
Buy : Greater than +15%
Hold : -15% to +15%
Sell : Less than -15%
Summary of Financials
DISCLAIMER
This report and any electronic access hereto are restricted and intended only for the clients and related entity of PT NH Korindo Sekuritas Indonesia. This report is only for information and recipient use. It is not reproduced, copied, or made available for others. Under no circumstances is it considered as a selling offer or solicitation of securities buying. Any recommendation contained herein may not suitable for all investors. Although the information here is obtained from reliable sources, it accuracy and completeness cannot be guaranteed. PT NH Korindo Sekuritas Indonesia, its affiliated companies, respective employees, and agents disclaim any responsibility and liability for claims, proceedings, action, losses, expenses, damages, or costs filed against or suffered by any person as a result of acting pursuant to the contents hereof. Neither is PT NH Korindo Sekuritas Indonesia, its affiliated companies, employees, nor agents liable for errors, omissions, misstatements, negligence, inaccuracy arising herefrom.
